Assets financing platform tackling the problem of financial exclusion in Africa, M-KOPA, has closed a $75 million growth equity funding round.
Asides the announcement of its round which boosts the company’s equity funding to $190 million, M-KOPA also celebrates its two million customers accumulated so far across four African countries including Kenya, Nigeria, Ghana and Uganda since inception in 2011.
Generation Investment Management and Broadscale Group led the round which included existing investors; CDC Group and LGT Lightrock and new investors such as LocalGlobe’s Latitude Fund and HEPCO Capital Management.
M-KOPA provides financing and digital financial services to underbanked consumers across its four market reach by matching fractional payment terms with customers’ daily or weekly earning and spending cycles.
Its customers range from ride-hailing drivers to small kiosk owners who use smartphones to run their businesses. But for a market where a sizable number of adults earn less than $5 daily, to afford a $100 smartphone is a luxury.
M-KOPA makes it possible for these consumers to make a down payment or small deposit and get a smartphone. Consumers’ income varies depending on what business they are involved in; however, they are all required to pay between 30 cents to $1 — or its equivalent across all markets — daily to offset the remaining costs at an average monthly interest rate of 3.1%.
The fintech company leverages digital micropayments and Internet-of-Things [IoT] technology to make its processes seamless and accessible to customers who can take advantage of this to build ownership of assets and credit histories over time through a flexible payment model.
To date, M-KOPA has unlocked over $600 million in financing through diverse products, including smartphones, solar lighting, solar-powered appliances and digital financial services such as cash loans and health insurance. The company asserts to have recorded almost 2.5 times growth of new customers in 2021 and is projected to reach 3 million customers by the end of 2022.
Added to its achievements, M-KOPA was recently recognised among the top 20 global venture and private-equity backed companies tackling key social and environmental issues as part of their business model in Fortune Magazine’s Impact 20.